Your Guide to Financing, Planning and Launching Your FranchiseWhether you're a first-time entrepreneur or a seasoned business owner, here's what the process will look like.
Are you considering startingyour own businessbut don't want to go through the process of beginning from scratch?
Purchasing a franchisecan be a great option for entrepreneurs who want to hit the ground running with a proven business model andbrand recognition.
Here's the catch:Financing and launchinga franchise can be more complex than starting a brand-new business.
After you've settled on the franchise concept you want to buy, let's explore what the process looks like for aspiring franchise owners. Whether you're afirst-time entrepreneuror aseasoned business ownerlooking to expand your portfolio, here's what you can expect when financing and purchasing a franchise.
Related: Considering franchise ownership? Get started now and take this quiz to find yourpersonalized list of franchisesthat match your lifestyle, interests and budget.
Analyze the Franchise Disclosure Document (FDD)
Once you have identified a potential franchise opportunity, you're ready to obtain theFranchise Disclosure Document (FDD)from the franchisor to solidify your choice.
The FDD is alegal documentthat outlines the terms and conditions of the franchise agreement and detailed information about the franchise system, its financial performance,fees and otherfactors that you, as a franchisee, should understand.
Make sure you review the FDD carefully andseek legal adviceto ensure that you fully understand all the costs and expenses you'll be responsible for if you decide to move forward.
Related:Top Financing Tips All Aspiring Franchisees Should Know
Develop a business plan
Developing a comprehensivebusiness planis critical for the success of any business — including franchises — as it can help you secure financing. Your business plan should outline your goals,marketing strategy, financial projections and operational plans.
Here's the best part: The franchisor may provide atemplate or guidelinesfor the business plan. But keep in mind that it's important to customize your plan based on your specific benchmarks.
Related:How to Write a Business Plan for Your Franchise
Focus on securing financing
现在是时候secure financing. Most franchisors require a minimum amount of personal investment, which can range from 20% to 30% of the total investment.
For example, if the total franchise investment is $100,000, you may be required to invest $20,000 to $30,000 of your personal funds. The remaining capital can be obtained through various financing options, such as loans, grants andcrowdfunding.
Some franchisors may offerfinancing options, such asin-house financingor partnerships with lending institutions which may provide you with favorable rates.
All situations are different, so it may be in your benefit to consult with a financial advisor to determine the best financing option for you.
Related:What Is Franchisor Financing? Here's Everything You Need to Know.
Sign the franchise agreement
Once you have developed a business plan and secured financing, you're ready to sign thefranchise agreement.
Thefranchise agreementis a legal contract that outlines the official terms and conditions of the franchise relationship. You should review the agreement carefully with legal guidance because it will include details aboutfranchise fees、知识产权、培训支持and more.
Related:The 9 Provisions Every Franchise Agreement Needs to Have — and What They Mean
Attend franchise training
You've signed! Before you get ready to open your doors, it's time fortraining.
The franchisor willprovide onboardingon the franchise system, operations, marketing strategies and other aspects of running the franchise. The training may take place at the franchisor's headquarters, online, or a mix of both.
Launch your franchise
Financing and purchasing a franchise can be a复杂和具有挑战性的process. Remember to conduct yourresearchon various opportunities, analyze the FDD and put together a business plan before securing financing. Then, you can complete your purchase, ramp up your operation and beginreaping the rewardsof business ownership.
